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Yikes! Illinois "Near the Point of Fiscal Disintigration"

We've heard a lot over the past few weeks about California being on the precipice of fiscal disaster, but did you know that Illinois is in a similarly catastrophic situation? Illinois is in such financial trouble that its deficit is $13 billion, nearly half of its $28 billion budget. Tom Elia of The New Editor links to an article by Ambrose Evans-Pritchard, who writes this:

Barack Obama's home state of Illinois is near the point of fiscal disintegration. "The state is in utter crisis," said Representative Suzie Bassi. "We are next to bankruptcy. We have a $13bn hole in a $28bn budget."

The state has been paying bills with unfunded vouchers since October. A fifth of buses have stopped. Libraries, owed $400m (£263m), are closing one day a week. Schools are owed $725m. Unable to pay teachers, they are preparing mass lay-offs. "It's a catastrophe", said the Schools Superintendent.

In Alexander County, the sheriff's patrol cars have been repossessed; three-quarters of his officers are laid off; the local prison has refused to take county inmates until debts are paid.

Oh my. When Sheriff's patrol cars get repossessed, the public is in serious trouble.

The Chicago Tribune has more on the potentially devastating impact of the state's deficit:

Rather than confront the imbalance head-on, standard practice in Springfield has been to resort to a combination of fiscal tricks. Revenue projections are unrealistically rosy, money is borrowed with full repayment pushed off years into the future, and multibillion-dollar backlogs of unpaid bills are allowed to fester.

The system was already primed for calamity when the steep recession that began in 2008 knocked it over the edge.

Perhaps the most chronic headache involves pensions. For decades, elected officials have shorted promised contributions to the state's public employee retirement funds. As a result, Illinois by far has the worst-funded pension systems in the nation.

It would be a tall order for the state to totally dig its way out of the hole in one year's budget. But playing catch-up is extremely expensive, and it grows more expensive the longer it takes. Because the state was so short of cash, it borrowed $3.5 billion to meet this year's pension obligations. Next year, debt service on that loan will cost $800 million. And that's in addition to more than $4 billion in pension obligations that the state will be on the hook for in fiscal 2011.

As [president of the watchdog Civic Federation Laurence] Msall sees it, Illinois is in such poor financial shape that it risks getting to the point where it can no longer make loan payments or meet state aid commitments to schools.

If that happens, he says, "Illinois' ability to borrow will be eliminated and the state will come to a screeching halt."

I wouldn't want to be anywhere near Illinois, particularly the big cities like Chicago, when the everything comes crashing down. Then again, we can expect the federal government to ride the rescue at the eleventh hour to save the Illinois state government from itself.

Knowing this information as we do now, it's hard to believe that government officials thought it would be a good idea for Chicago to bid for the Olympics. If it had actually been selected, the state and city would have been required to spend millions of dollars in preparation when its deficits were already overwhelming the state budget. Illinois is sinking so far into insanity and chaos that it's like we're watching Lord of the Flies come to life.


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Comments (22)

Gee, Barry was a legislator... (Below threshold)
GarandFan:

Gee, Barry was a legislator from Illinois, along with most of his major White House staff....you don't suppose...............

Maybe Obama can dispatch La... (Below threshold)
RicardoVerde:

Maybe Obama can dispatch Larry Summers. Just look what he did for Haavad not to mention that whole stimulus thing.

Man,I love this state! Hom... (Below threshold)
apb:

Man,I love this state! Home to the Jug-Eared Douche, my big Dick in the Senate (Durbin), and my fa-a-a-vorite Rep, Debbie "Dumbass" Halvorson. That's the national scene. Then I have my local incompetent Kosel - a RINO if there ever was one.

Time to scurry out and pick up a new 'piece' and ammo to defend the home front.

In Alexander County, the... (Below threshold)
wolfwalker:

In Alexander County, the sheriff's patrol cars have been repossessed;

I'm sorry, but that cracks me up. I mean, I know it's bad that the police can't get around, but it's just so purely "theater of the absurd" that I can't help laughing. They financed their police cruisers?!?

The third (or fourth?) shoe... (Below threshold)
ParamusParis:

The third (or fourth?) shoe to drop will be New York. And honestly, I am looking forward to it because nothing short of bankruptcy will wake the morons in Albany, and the really morons who vote for them from their depravity.

Well OBVIOUSLY "the rich" a... (Below threshold)
GarandFan:

Well OBVIOUSLY "the rich" are not paying their fair share!

Obviously this is all Bush'... (Below threshold)
Caesar Augustus:

Obviously this is all Bush's fault.

Same in Pennsylvania. We're... (Below threshold)
RB:

Same in Pennsylvania. We're facing a $3B budget hole (out of about $27B budget)....and Gov proposes a coming-FY budget that assumes receipt of as-yet-to-be-legislated-or-appropriated $850M from Washington. Pure genius.

Illinois, the definition of... (Below threshold)
mpw280:

Illinois, the definition of dysfunctional democratic government. Not to mention, crooked, corrupt, and F'd up. The tax rate is about to go through the roof, but they won't admit it. The union pension problem is going to be a GYNORMOUS problem that nobody is paying much attention to. Plus we have probably some of the most dimwitted morons in the senate and house. Yet the people of this country elected a product of this system on the platform of "Hope and Change" like that has happened in Illinois in the last 50 years. mpw

"Barack Obama's home state ... (Below threshold)
davidt:

"Barack Obama's home state of Illinois..."

Wait a minute. Isn't Hawaii supposed to be Obama's home state?

Or, uh, the first Pacific President?

No wait, Citizen of the world! That's it!

Now, I'm even more glad I l... (Below threshold)
Sheik Yur Bouty:

Now, I'm even more glad I live in Texas...

I *almost* feel sorry for t... (Below threshold)
Gmac:

I *almost* feel sorry for them, except for the fact that they voted for this all by themselves. The Democrat party will rue the day they started playing kick the debt down the road with the hope that it would never comes due.

Obviously 'The Won' will save the day with a taxpayer funded bailout like he has for all the rest of his pals so far.

If unbridled debt is the pl... (Below threshold)
914:

If unbridled debt is the plan, then Barry's the Man.

It's not surprising at all ... (Below threshold)
Oyster:

It's not surprising at all to find that Illinois is in trouble, nor California. As they tried so very hard to be European-like with burgeoning social programs, it's also not surprising to find that Spain, Germany, France, Greece, etc are also teetering on the precipice of fiscal disaster.

We're also treated to the spectacle of European citizens in these countries going on strike and protesting vigorously against any attempts by their home governments to rein in spending - particularly in regard to social programs. Can the citizens of Illinois and California be far behind?

The people want, want and still want. And when they find that they can't afford it and the treat of losing their goodies looms overhead they throw a tantrum.

Most of the lessons I've learned in life were by observation of others mistakes. Why aren't we paying more attention to those in Europe that so many of us wish to emulate?

That should read "the th... (Below threshold)
Oyster:

That should read "the threat of losing their goodies". Gah.

You guys are all wrong abou... (Below threshold)
klrtz1:

You guys are all wrong about this. Illinois is doing so badly because they let their soul, their light, their life, Barack Hussein Obama, go live in Washington. They never had any of these problems when he was living in Chicago. They lost the key stone to their arch and now they are crumbling into the abyss.

As a life-long Illinois res... (Below threshold)
hermie:

As a life-long Illinois resident, we could see this coming decades ago, but the powers in Springfield and Chicago continued their old parlor tricks of spend, borrow and tax.

Obama was a key member of the Illinois Senate; at least that's what he ran for US Senator and President on ... his 'experience' and 'leadership'. He was responsible for part of the problem, which he brought over to the finances of the entire country. Chicago-style accounting; thank you Chicago, ACORN, Soros and MSM.

I too have lived my whole l... (Below threshold)
jim m:

I too have lived my whole life in Illinois up until last Oct.

During that time the dems have controled the state legislature for as long as I can remember. It has never been run with anything resembling fiscal responsibility. The last ten years have been remarkable only for the increasing trend to pay off political factionas and interests and attenpts to buy votes with givaways of taxpayer funds.

The Olympics is one such example. $200 M spent on friends and cronies. The constant battle for a third airport, the only thing which delays it is deciding which group of political insiders gets to dictate where it goes so the friends and family who have bought up land in that area can recieve a windfall.

With the CTA (public transportation) facing cutbacks and insolvency, the governor decided it was time to let all senior citizen ride for free. WTF? This was little more than vote buying.

Beholden to the unions the dems cannot make any meaningful stand for financial discipline. The RINO party (there are few conservatives in the Illinois GOP) is hardly any different.

A pox on both their houses. No longer living there I will enjoy watching the disaster from a safe distance.

Clearly the state needs to ... (Below threshold)

Clearly the state needs to start increasing benefits for the poor, after all, they'll be hardest hit. And maybe start some capital improvement projects to create some jobs. That's the ticket...

A pox on both thei... (Below threshold)
Mac Lorry:
A pox on both their houses. No longer living there I will enjoy watching the disaster from a safe distance.

I'm not sure there's any location within the borders of the U.S. that's safely removed from the consequences of a financial meltdown in Illinois, New York, or California. I expect there will be calls for rescue by the Federal government to mitigate this man-made disaster (dems say it's a Bush-made disaster). That means more federal debt and that impacts all the U.S. The real danger is that once any single state gets a special rescue then every state will be in line for the same rescue.

I have a great idea. I don... (Below threshold)
Oyster:

I have a great idea. I don't know who is sitting in Obama's old state Senate seat in Illinois, but someone needs to contact him/her right away and tell him/her that all he/she needs to do is blame Obama's term in office for the state's woes.

Wouldn't it be fun to see how he reacts to having the same "blame the last guy for everything" tactic turned on him?

With all the thugs, crimina... (Below threshold)
OLDPUPPYMAX:

With all the thugs, criminals and shysters Hussein has moved from Chicago to DC, you'd think problems in Illinois would be resolving themselves. But I guess democrat thieves breed like democrat voters--indiscriminately and gleefully!




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